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Mass. retailers predict 6% spike in sales this holiday season

A shopper passed a Macy's store holiday window in Downtown Crossing in Boston in December 2020. (Craig F. Walker/The Boston Globe via Getty Images)
A shopper passed a Macy's store holiday window in Downtown Crossing in Boston in December 2020. (Craig F. Walker/The Boston Globe via Getty Images)

Retail sector sales in Massachusetts typically total about $21.25 billion in November and December, and retailers in the shopping season that is now gathering momentum are expecting a significant 6% increase in sales compared to 2020.

The Retailers Association of Massachusetts (RAM) on Monday released its annual forecast, which marks a stepdown from the 9% sales surge in 2020. It also trails the National Retail Federation's projections of an 8.5 to 10.5% lift in annual retail sales.

Still, the 6% growth rate would be the second largest in the last decade, and is supported by fourth quarter inventories that are up by 4.1% over 2020, according to a survey of RAM members.

Retailers listed inflation, inventory delays and staffing shortages as the three top challenges this season, according to the survey. Stores reported that payroll costs for members were up 6.7% over 2020.

Holiday sales account for an average of 20% of annual retail sales, according to RAM, which says 60% of its members this year report they are selling online, compared to 50% a year ago and only 29% during the 2019 holiday season.

"The acceleration of online offerings and sales by smaller sellers has been apparent during the COVID crisis," RAM President Jon Hurst said. "Main Street has worked overtime to meet their customers where and how they wanted to be served during these challenging and evolving times."

While online sales nationally are projected to reach 25% of all retail sales, RAM said internet sales are expected to total 5% of total holiday sales at smaller Massachusetts retailers.

In a bid to encourage people to spend their holiday budgets locally, Gov. Charlie Baker and Lt. Gov. Karyn Polito are joining RAM officials at a shoe store and a music store in Needham Monday to urge people in a new campaign to actively consider where they choose to shop.

"Much of the Massachusetts economy relies on all of us doing our part, so we need to shop like jobs depend on it, because they do," Baker said in a statement. "By choosing local, you're sustaining jobs in your community."

The retail sector employs 600,000 people in Massachusetts, according to RAM, which represents 4,000 retailers and restaurants.

A #BuyInMA ad campaign featuring radio and digital ads launches Monday, and officials are encouraging shoppers to visit BuyInMA.org to learn about promotions and savings from local stores and restaurants.

Hurt said the COVID-19 pandemic accelerated the growth of appointment-only shopping and curbside pick-up and delivery, aspects of customer service he said would "undoubtedly continue to exist long after the health and economic crisis has passed."

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